Japan's Nikkei jumps on Abe's stimulus package

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Last Updated: Fri, Jan 11, 2013 03:15 hrs

Japan's Nikkei stock index jumped Friday after Prime Minister Shinzo Abe announced a massive spending package intended to breathe life into the country's moribund economy. But other Asian benchmarks fell after the U.S. reported higher-than-expected jobless claims.

The Nikkei 225 in Tokyo gained 1.2 percent to 10,780.45 following Abe's announcement of an anti-recession stimulus package of more than 20 trillion yen ($224 billion) that is intended to add 2 percent to Japan's real growth.

Abe's Liberal Democratic Party, which won a parliamentary election last month, has promised major public works spending and other measures to revive the economy, which has been mired for years in deflation, or continually dropping prices, which deadens economic activity.

A sharp improvement in Chinese trade boosted helped boost Wall Street on Thursday even though the U.S. government reported that weekly applications for unemployment benefits ticked up last week. The Labor Department said applications rose 4,000 to 371,000, the most in five weeks.

The Dow Jones industrial average rose 0.6 percent to 13,471.22.The Nasdaq composite index rose 0.5 percent to 3,121.76. The Standard & Poor's 500 rose 0.8 percent to 1,472.12, its highest close in five years.

Michael Hewson of CMC Markets said in an email commentary that the data was "a slight disappointment" but that investors put aside their concerns about the U.S. after China's strong trade data, which suggests global demand might be recovering.

Benchmark oil for February delivery rose 5 cents to $93.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 72 cents to finish at $93.82 a barrel in New York on Thursday.

In currencies, the dollar rose to 88.98 yen from 88.19 yen late Thursday in New York. The euro was unchanged at $1.3254. The euro jumped Thursday after the European Central Bank left its interest rate at the record low of 0.75 percent. In a press conference, ECB President Mario Draghi said the eurozone economy should start to grow again later this year.